Monday, August 8, 2016
Interview With Mike Mothner, Wpromote On Growth, Acquisitions
Story by Benjamin F. Kuo
Last week El Segundo-based Wpromote acquired fellow marketing agency Standing Dog, in a deal which brings the company to 260 employees, and continues to grow the company. We caught up with founder and CEO Mike Mothner--who we first interviewed back in 2007--to catch up with the company, gets some hints and tips on growing a company, the challenges of bootstrapping, and why Wpromote hopes to be buying more companies in the future.
Tell our readers who haven't heard of Wpromote, what your business is all about?
Mike Mothner: The business today, is we are a digital agency focused on customer acquisition and growth for businesses of all types. Our clients are everyone from fast growing, freshly funded startups, to the Fortune 100. The area which probably is really attuned to your readers, is we also serve many mid-market, growth oriented companies that are looking to grow and acquire customers, with paid and earned digital channels, paid search, paid media, social, email, and organic SEO, as well as digital PR and content. If it's a digital channel, and there are customers to connect with, we are looking to help those companies grow. We have a strong focus on ROI, and the high growth, mid-market companies are the backbone of our growth. In that high growth mid market, we are looking for challenger brands, those who are willing to challenge how things are done, and challenge their growth and goals.
It's been a long time since we last talked, and it looks like you've grown significantly – tell us a bit about the growth?
Mike Mothner: With the acquisition of Standing Dog, which technically closed today, that added about 75 people to bring us to 260 employees. We are headquartered in El Segundo, where we have a beautiful campus, and now have those 70 people in Dallas, another ten in Chicago, and a handful in San Francisco. We also have an office now in Houston as well as a result of the acquisition. So we have around 260 people in five offices, and a $35 million run rate.
What has helped you grow to the size where you are now?
Mike Mothner: The key is, we have been selective about who we work with. We forge really strong partnerships with our clients, and we're really an extension of their internal marketing reach of those clients. So we are looking for clients looking for significant growth. We're not the vendor that does SEO, and not the vendor that does paid search, we're their marketing vendor. We're sitting at the table with them, and in the end we're held accountable to their growth goals. We're not for companies comfortable with their status quo—they're not usually a good fit. We're looking for companies entering new marketing, growing their market share. That's where we're the most impactful. Those are the clients who help us growth ourselves. We're looking for the $20 million company which wants to become $200M, and working with hundreds of those clients is what has driven our own growth.
Over the past few years, there has been a lot of talk about what the future of paid search, SEO, and other areas is with the advent of mobile, social, etc. What are your thoughts on that?
Mike Mothner: I think, with search centric companies, that's a scary concept. People are moving from the desktop to mobile, and fewer people are searching using Google, and they've been asking—where does that leave us? Our philosophy, is we've been agnostic to the device and channel. As long as there are buyers to connect with, B2B, or B2C, there is work to be done. What we have found, because of mobile, is the complexity of attribution, with people jumping from the devices, to search, and social, and email, and other channels, attribution is really hard. It used to be a fairly short path from people search and getting what they were looking for. Now, it's long, and complex. It's a customer centric world. It's not as simple as someone looking at something on Google and seeing if they did or didn't buy. That journey is far more complex. We've embraced that complexity, and I think we've benefited from that. Taking that a step further, we've worked with lots of brands and retailers with physical, brick-and-mortar locations. For example, Forever 21 has 720 locations, and they have invested extensively in their physical infrastructure. They don’t need digital sales, they need to drive people into stores. For better or for worse, they have that physical presence. The understanding of how to bridge the gap from digital to non-digital transactions is super important to those guys, and that is the question we're increasingly able to answer. If we were a more traditional, paid search agency, and that's all we did, it would be a much more challenging proposition for us.
What are the biggest challenges you have had to overcome to grow the company?
Mike Mothner: I think there are two. We've been bootstrapped from the beginning, and never taken outside investment. It's been wonderful, as we've been able to control our own destiny. But, we haven't had that support network from a growth perspective. We've had to do lots of experimentation, and at each new phase, we've been blazing a new trail, and haven't had that outside guidance. That makes it more challenging. We've had plenty of opportunities to raise money, but just haven't had a compelling use for those dollars. It's more challenging without that safety net, whether that's cash on your balance sheet, or investors to look to, a board to help you navigate the challenges. On the flip side, we've emerged from that stronger and smarter because of it. The other challenge, even though everyone says it, is how we manage growth, hiring, and retention of people. It's ridiculously important in what we do, keeping people engaged, keeping them up on current trends, and keep them aligned with our clients expectations. When we were just 20 people, it's easy to find that alignment. With 250, that's a significantly different challenge. I think that will continue to be a challenge, as we go to 800 people, and will always be our number one challenge. Acquiring businesses, and generating sales and growth comes pretty easy to us. But, we've go to make sure we're not resting on our laurels as people, and use technology effectively. We've found it's very, very hard to attract, retain, train, and motivate digital marketers, and if you're just a merchant or brand trying to do this yourself, it's inevitably even harder for you. That why utilizing a partnership with someone like Wpromote really makes a ton of sense.
So, will you be buying any more companies?
Mike Mothner: Over the last decade, we've seen ourselves grow 30 percent a year, like clockwork. We've been happy with that growth, but our strategy has been to repeat those sorts of acquisitions when it makes sense to augment that growth. It's not that we hit a plateau which we wanted to overcome with the acquisition; we've been continuing to grow organically. However, by layering on the acquisition we're able to access new verticals that we did not have deep expertise in, and also it givse us more great people, a new geography, and other strategic value. With Standing Dog, a Texas company, we gained a significant inroad into the hospitality and real estate market. One of their biggest customers is Marriott. We've gained a deep proficiently in that industry through this acquisition, and there is significant, geographic value to being in Dallas and Houston, markets we've always wanted to be in. Plus, they are great people. This is really a one plus one equals three. We'll find other acquisition targets which can help us fulfill those two or three things, and we are also going to continue to execute on our plan, and do it while not tripping over our own shoelaces when we run.
Thanks, and good luck!